The national capital account shows how the saving from the national income account and consumption of fixed capital (depreciation) are used to finance gross fixed capital formation. If, as is currently the case for Australia, the nation's saving and consumption of fixed capital are not sufficient to pay for all the fixed capital needed for Australian production, the shortfall must be borrowed from overseas. The amount borrowed from overseas is shown in the national capital account as a negative entry for net lending to non-residents.

Tables 29.13 and 29.14 show the national capital account for a number of years between 1965-66 and 1999-2000; table 29.13 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.14 shows annual time series from 1991-92 to 1999-2000.

29.13 NATIONAL CAPITAL ACCOUNT, Current Prices - Five-Yearly

1965-66

$m

1970-71

$m

1975-76

$m

1980-81

$m

1985-86

$m

1990-91

$m

Net saving

- Non-financial corporations

394

549

-1,400

355

2,203

-10,138

- Financial corporations

132

279

732

304

-1,880

5,046

- General government

345

626

-1,052

-2,835

-8,447

-4,789

- Households

1,590

3,220

8,365

12,922

17,008

18,002

- Total net saving

2,461

4,674

6,645

10,746

8,884

8,121

Consumption of fixed capital

3,117

5,264

11,025

20,954

38,323

62,278

Net capital transfers receivable from non-residents

46

56

-27

167

830

2,071

Gross saving and capital transfers

5,624

9,994

17,643

31,867

48,037

72,470

Gross fixed capital formation -

- Private

4,284

7,353

12,450

27,996

44,699

65,950

- Public corporations

966

1,401

2,883

5,640

11,033

12,731

- General government

1,039

1,437

3,595

4,149

8,006

10,310

- Total gross fixed capital formation

6,289

10,191

18,928

37,785

63,738

88,991

Changes in inventories -

- Private non-farm

143

358

74

144

838

-1,136

- Farm and public authorities

-59

228

106

262

-5

-394

- Total changes in inventories

84

586

180

406

833

-1,530

Acquisitions less disposals of non-produced non-financial assets

-

-

-

-

-

-7

Statistical discrepancy

150

-1

-11

-727

-1,876

626

Net lending to non-residents

-899

-782

-1,454

-5,597

-14,658

-15,611

Total capital accumulation and net lending

5,624

9,994

17,643

31,867

48,037

72,470

Source: Australian System of National Accounts (5204.0).

29.14 NATIONAL CAPITAL ACCOUNT, Current Prices - Annual

1991-92

$m

1992-93

$m

1993-94

$m

1994-95

$m

1995-96

$m

1996-97

$m

1997-98

$m

1998-99

$m

1999-2000

$m

Net saving

- Non-financial corporations

-3,376

1,721

8,547

7,372

8,604

4,390

5,904

1,121

5,005

- Financial corporations

4,212

8,638

6,190

3,071

2,738

2,682

4,728

1,672

3,161

- General government

-16,714

-20,553

-17,875

-15,648

-10,342

-1,156

6,689

11,230

7,149

- Households

15,581

12,946

11,855

14,239

12,638

15,041

7,046

8,289

9,712

- Total net saving

-297

2,752

8,717

9,034

13,638

20,957

24,367

22,312

25,027

Consumption of fixed capital

64,656

68,314

72,333

74,880

78,495

80,268

85,866

91,509

97,531

Net capital transfers receivable from non-residents

2,079

604

300

540

1,049

1,323

1,097

1,186

1,183

Gross saving and capital transfers

66,438

71,670

81,350

84,454

93,182

102,548

111,330

115,007

123,741

Gross fixed capital formation

- Private

62,100

69,850

77,476

86,794

90,254

97,544

111,592

117,535

127,493

- Public corporations

12,382

11,086

10,346

12,202

11,638

9,792

8,342

11,450

8,514

- General government

10,365

11,107

11,119

11,656

11,765

12,783

12,427

13,245

15,097

- Total gross fixed capital formation

84,847

92,044

98,941

110,652

113,657

120,119

132,361

142,230

151,103

Changes in inventories

- Private non-farm

-2,219

1,003

1,414

1,529

874

1,670

-59

5,343

2,300

- Farm and public authorities

-195

-691

385

379

-711

-2,650

749

-36

-238

- Total changes in inventories

-2,414

312

1,799

1,908

163

-980

690

5,307

2,062

Acquisitions less disposals of non-produced non-financial assets

-

33

-17

-32

-25

6

-30

19

64

Statistical discrepancy

-4,696

-6,079

-3,436

-

-

-

-

-

3,070

Net lending to non-residents

-11,298

-14,639

-15,937

-28,074

-20,613

-16,597

-21,691

-32,549

-32,558

Total capital accumulation and net lending

66,438

71,670

81,350

84,454

93,182

102,548

111,330

115,007

123,741

Source:Australian System of National Accounts (5204.0).

Graph 29.15 shows gross fixed capital formation (investment) by institutional sector as a proportion of GDP. For non-financial corporations this proportion generally fell during the 1970s, then rose to a peak of 13.2% in 1981-82. It has subsequently been above 10% except for the years 1991-92 and 1992-93, and was 10.9% in 1999-2000. Household investment as a proportion of GDP was 9.6% in 1999-2000. General government investment as a proportion of GDP peaked at 4.6% in 1965-66. It has generally fallen since then and was 2.4% of GDP in 1999-2000. Financial corporations investment peaked in 1988-89 and 1989-90 at 1.9% of GDP. It has generally fallen since then and was 1.1% of GDP in 1999-2000.

Graph 29.16 shows net lending by institutional sector as a proportion of GDP. A positive percentage for a sector indicates that it is a net lender to other sectors; a negative percentage indicates that it is a net borrower. The household sector has been a net lender for most years. As a proportion of GDP, net lending by households peaked in 1974-75 at 9.1%. Since then it has trended downwards, and in five of the last seven years the household sector has been a net borrower. Non-financial corporations have been net borrowers over the whole period from 1965-66 to 1999-2000, and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 3.0% in 1999-2000. After being a net borrower thoughout the 1980s, the financial corporations sector returned to being a net lender in 1990-91 and has remained so since then. In 1999-2000 financial corporations net lending represented 0.2% of GDP. After recording a record level of borrowing in 1992-93 as a proportion of GDP (5.8%), general government borrowing has steadily declined, and from 1997-98 this sector became a net lender. In 1999-2000 general government net lending represented 0.7% of GDP.